Did you know…? Reports show that HSA’s are under-utilized in terms of investing and growth. The average account balance for people who invested their contributions in 2023 is $18,362, which is 7.3 times the size of the non-invested account!
Here are some helpful things to know that may help you keep track of your available funds…
Who sets the rules for my HSA?
Because HSA monies are tax-free, the IRS sets rules on these funds such as what types of items can be expensed and how much can be input each year. Each year the HSA maximum contribution typically increases. For 2025 the individual limit is $4,300 while the family limit is $8,550. Benefit plans conform to the IRS regulations but may have additional policies. HSA monies typically roll over each year, meaning you are accruing money each year.
What can I use my HSA for?
You can use an HSA to pay for qualified medical expenses (QME) such as co-payments and deductibles as well as prescription drugs, and medical equipment and supplies. There are literally thousands of items you can utilize your HSA for such as sunscreen (over SPF 15) and exercise equipment (when accompanied by a letter of medical necessity).
Do I have to wait to accumulate funds in my HSA account before spending my contributions?
Yes. Each new plan year you select how much to contribute to your HSA and this amount is taken out, tax-free, each paycheck.
Example: Your plan year starts in January, and you have no roll-over amount from the previous year. You allocate $3,600 for the year, meaning you’ll contribute $300 a month to the FSA. By end-February you’ll have contributed $600 to your HSA. You have that $600 to spend, assuming you haven’t had any other reimbursements.
Do I need to have a cash balance to use my HSA?
Yes. While you can choose to invest all or some of the monies like you would in an IRA or keep the account in cash you need to have the cash balance available to cover any reimbursement. If all monies were tied up in investments you would need to sell investments in order to cover the reimbursement.